Small Business Sales – 80/20 Rule Continued

In my last article I brought up the 80/20 rule and talked about how 80% of your business comes from 20% of your customers.

I want you to think a little more about 80/20. Actually you can apply the principal to a lot of things in your business.

If you have employees I’ll bet 80% of the work comes from 20% of them.
If you have sales people I’ll bet 80% of the sales comes from 20% of them.
If you have vendors that you buy from I’ll bet 80% of your purchases comes from 20% of them.
If you look at your advertising I’ll bet 80% of your prospects comes from 20% of your ads.
If you look at your internal problems I’ll bet 80% of those problems come from 20% of your employees.
If you look at customer problems I’ll bet 80% of those problems come from 20% of your customers.
I’ll bet 80% of your revenue comes from 20% of the products or services you sell.

You can go on and on applying the principle to many aspects of your business and personal life.

So what’s the point? The point is you need to look at everything you do in your business. You need to analyze and test. You need to constantly improving. The Pareto Principle is just one of the ways to look at things. If you know who your problem customers are maybe they are not worth having as customers. If you know what the products or services that you sell are the biggest contributors to your bottom line, maybe you should focus on those and forget the rest. I think you get the point; “constant improvement” will keep you ahead of your competition and make you more money.